A Type of Financing Instrument in Which the Owner (Vendor)

question 37

Multiple Choice

A type of financing instrument in which the owner (vendor) retains the legal title until the buyer (vendee) fulfills the terms of the purchase contract:

• A) lease contract
• B) installment sales contract
• C) wraparound contract
• D) junior lien contract

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Definitions:

Accounts Receivable Balance

The total amount of money owed to a company by its customers for goods or services provided on credit.

Credit Sales

Sales made on credit, allowing the buyer to pay at a later date.

Days' Sales Outstanding

A financial metric that shows the average number of days it takes a company to collect payments after a sale has been made.

Exercise Value

Equal to the current price of the stock (underlying the option) less the strike price of the option.